CAIRO: Hungary is foreign territory for Egypt’s business community. While there is a flow of trade between the two nations, there are many investment opportunities to be seized by potential Egyptian investors, said members of a Hungarian delegation currently visiting Cairo.
Headed by György Rétfalvi, general director of the Investment and Trade Development Agency (ITD), a Hungarian delegation came to showcase trade and investment opportunities to the Egyptian business community.
At a roundtable discussion Thursday, organized by Egypt’s Ministry of Trade and Industry, potential investors also addressed their concerns about foraying into the Hungarian market.
Hungary, which became a member of the European Union in 2004, is expected to see a marked drop in GDP growth in 2009 due to the economic crisis.
The delegation’s visit, Rétfalvi said, reflects the importance of Egypt as a trade and investment partner, particularly given its geographic location as a gateway to Middle East and African markets.
Currently, Hungary’s exports to Egypt total $263 million, 94 percent of which is machinery with the remaining 6 percent distributed between plastics, chemical products and textile.
Egypt’s exports to Hungry total $12.5 million, mainly in agricultural products, textiles, metals, chemical products and raw material.
Representatives from Egypt’s exports councils raised several issues during the meeting, including what they described as Hungary’s high corporate taxes as well as visa issues, and pointed to modifications in investment laws and incentives that could spur foreign investment.
“Hungary’s corporate tax is 19 percent, the same rate as Slovenia, and 1 percent less than Egypt, and 3 percent higher than Romania, explained Rétfalvi.
While ITD does not conduct visibility studies for foreign businessmen, “we provide all the needed information and facilitation needed for [investment], he added.
“One of the main incentives Hungary has is – even though it only has 10 million people – it is considered a member of a 500 million [strong] community: the EU, Rétfalvi said.
“Business has already started shifting to Eastern Europe, he added, “For example, giant carmaker Audi established it’s first Eastern Europe plant in Hungary. There’s also a saying that the everyday the center of gravity moves 50 km to the east in Europe.
Commenting on efforts to facilitate procedures for foreign investors in Hungary, Rétfalvi spoke of the country’s one-stop-shops, so “investors don’t need to go to different agencies and authorities to get the approval needed to start a business.
“Moreover, we dedicate a support person to accompany the investor to facilitate their mission.
Answering Daily News Egypt’s question about the delegation’s goal, Rétfalvi said, “This is the first of its kinds and we [are here to] spread information about investments and trade opportunities. We look forward to meeting with the business community, to initiate a long-term process and set up a follow-up mechanism.
Figures reveal how deeply the Hungarian economy has been affected by the economic crisis. The country’s exports growth, which was 5.6 percent in 2008, is forecast to plunge to -12 percent in 2009.
“This is mainly because Hungary’s exports account for 80 percent of its GDP. However, the decline in GDP growth does not effect foreign direct investments significantly, he said.
To cope with the current financial environment, the Hungarian government announced significant cuts to state expenses.
Currently, no Egyptian businesses operate in Hungary, however, Rétfalvi said, there has been increasing interest from investors in the pharmaceutical industry, machinery and water equipments.
Hungary’s ambassador to Egypt said that the embassy is working on networking with Egypt’s main players in the market to inform them of opportunities in Hungary.